2015 (11) TMI 1089 - AT - Service Tax

Levy of penalty - Failure to file ST-3 Returns - Suppression of value - Evasion of service tax - appellant has discharged the Service Tax liability and interest thereof on being pointed out - Held that - the responsible officials of the appellant were aware to the fact that the difference between the amounts of Service Tax paid and Service Tax collected was credited to the profit and loss account as commission to show more profit. On the face of such categorical admission and standing by it in the cross-examination by the Internal Auditor of the company, we find no reason to interfere in the impugned order, which imposed penalty under various Sections of the Finance Act, 1994. - levy of penalty confirmed - Decided against Assessee.

Summary

Issues:
1. Discharge of Service Tax liability at appropriate rate.
2. Failure to file ST-3 returns correctly.
3. Suppression of taxable services value with intent to evade payment.
4. Imposition of penalties under Sections 76, 77, and 78 of the Finance Act, 1994.
5. Allegations against Consultant for misguiding and cheating.
6. Appellant's defense based on Consultant's actions.
7. Applicability of Section 80 of the Finance Act, 1994.
8. Knowledge of non-payment/short payment of Service Tax by the appellant.
9. Arguments for setting aside penalties.
10. Evaluation of evidence and statements presented.
11. Comparison with previous Tribunal judgments.
12. Justification of penalties imposed.

Analysis:
The appeal was directed against an Order-in-Original passed by the Commissioner of Service Tax, Mumbai, regarding the appellant's failure to discharge Service Tax liability correctly and file ST-3 returns accurately. The appellant, engaged in issuing Air Tickets, claimed their Consultant had misguided them, leading to penalties under Sections 76, 77, and 78 of the Finance Act, 1994. The appellant argued they had paid the Service Tax liability and interest, seeking the penalties to be dropped based on the Consultant's actions.

The appellant contended that the Consultant had cheated them by pocketing the difference in Service Tax paid, but evidence suggested the appellant's knowledge of the non-payment/short payment of Service Tax. The Tribunal found the Consultant's statement and cross-examination revealed the appellant's awareness of the discrepancies in Service Tax payments, discrediting the appellant's defense. The Tribunal noted the lack of evidence against the Consultant for forgery, unlike in previous cases cited by the appellant, leading to the dismissal of the appeal.

In conclusion, the Tribunal upheld the penalties imposed under various sections of the Finance Act, 1994, based on the evidence presented and the appellant's acknowledged involvement in the discrepancies. The Tribunal found no grounds to interfere with the original order, deeming it legally sound and correct in light of the appellant's awareness of the Service Tax irregularities. The appeal was consequently dismissed, affirming the penalties and liabilities as determined by the Commissioner of Service Tax, Mumbai.